L&T Services (LTTS) Q2 24/25 earnings summary

Executive summary

• Revenue grew 4.5% sequentially and 7.8% year-over-year in Q2 FY25, with broad-based growth across Mobility, Sustainability, and Tech/Hi-Tech segments.

• Secured multiple large deals, including two $20M+ and four $10M+ TCV wins, significant empanelment agreements, and launched new offerings and a brand campaign.

• Strategic focus on Mobility, Sustainability, and Tech/Hi-Tech, each targeted to become standalone billion-dollar units, with segment reorganization effective April 1, 2024.

• Investments in technology and sales impacted H1 EBIT margins, but are expected to drive future growth.

• Interim dividend of ₹17 per share declared.

Financial highlights

• Q2 revenue: ₹25,729 million (₹2,573 crore), up 4.5% sequentially and 7.8% year-over-year; USD revenue at $306.7 million (up 3.9% QoQ, 6.5% YoY).

• EBIT margin for Q2 at 15.1%; Net income for Q2: ₹3,200 million, up 1.3% year-over-year, representing 12.2% of revenues.

• EBITDA for the quarter was ₹4,660 million, EBITDA margin at 18.1%.

• Free cash flow for Q2: ₹417 crore; cash and investments at ₹2,849 crore at quarter end; cash and cash equivalents at ₹9,070 million as of September 30, 2024.

• Basic EPS at ₹30.20 for the quarter.

Outlook and guidance

• FY25 revenue growth guidance reaffirmed at 8–10% in constant currency.

• EBIT margin aspiration for FY25 remains at 16%, with H2 margins expected to be higher than H1.

• Medium-term ambition: $2B revenue and 17–18% EBIT margin.

• Q3 expected to be soft for Mobility due to seasonality, but strong for Sustainability and Tech; Q4 expected to rebound.

• Operating segments reorganized from five to three (Mobility, Sustainability, Hi-Tech) effective April 1, 2024.